1.Craig Whyte complained to the Independent Press
Standards Organisation that the Daily Record breached Clause 1 (Accuracy) of
the Editors’ Code of Practice in an article headlined “Feet under the desk office,
a swift £18m”, published on 7 June 2017. The article was also published online
in substantively the same format, headlined “Exclusive: Document reveals Craig
Whyte pocketed £18m on day of Rangers takeover”, published on 7 June 2017.

2. The
article reported that the complainant had purchased the Rangers Football Club
(Rangers) for £1 and claimed that his “personal balance sheet rocketed before
his feet were even under the desk”. It reported that the complainant
“immediately pocketed £18million on the day of the Ranger’s takeover”, and that
the assignation agreement signed by the complainant on behalf of his company
Wavetower Limited, the bank, and Rangers, had demonstrated this. The article
included an excerpt of the assignation agreement and sought to explain its
contents.

3. The
article reported that at the time that the complainant had purchased Rangers,
it was in £18million worth of debt, owed to the bank. It claimed that the
complainant had used £18million of Rangers’ money, raised from future season
ticket income which had been mortgaged to a ticket firm, to buy its own debt
and repay it to the bank in full. The debt was assigned to Wavetower Limited
for consideration of £18million; this meant that Rangers’ debt was not cleared
but rather transferred from the bank to Wavetower Limited. The article reported
that the “floating charge” held by the bank was also transferred to the
complainant, meaning that he became Rangers’ major secured creditor. It
reported that Wavetower Limited was now owed £18million by Rangers, including
interest of £962.29, charged by the complainant for the first day of the debt.

4. The
article reported that Rangers had gone into administration since the time that
the complainant had purchased it. It reported that the assignation of Rangers’
debt to Wavetower Limited was not illegal; however, it claimed that this added
credence to the theory that the complainant’s intention was always to “plunge Rangers
into administration”.

5. The
article referred to Rangers as the complainant’s “cash cow” and included an
image which listed other profits which he had allegedly gained following the
purchase of Rangers. It was reported that the complainant had reneged on his
pledge to pay Rangers’ outstanding tax bill of £2.8million; that the
complainant had sold shares held by Rangers in another football club worth
£244,000, and deposited the money in an account that only he had control of,
“not Rangers”; and that another company, owned by the complainant, owned shares
in Rangers, which meant that he could become a consultant on a salary of
£60,000 per month. The word “ker-ching” appeared next to each claim.

6. The
complainant said that he did not receive any funds from the purchase of Rangers,
or a salary whilst he was its director. He said that the headlines and the
article gave the misleading impression that he personally profited, or gained
assets, from the purchase of Rangers and that it was inaccurate to describe it
as his “cash cow”. He said that the inclusion of the word “ker-ching” next to
the claims had sought to strengthen this impression. The complainant also
expressed concern that the newspaper did not contact him for his comment prior
to publication.

7. The complainant said that he did
not receive £18million from his purchase of Rangers. He said that Rangers had
entered into a transaction with the ticket firm to sell season tickets in
advance, and had used this money to repay Rangers’ debt directly to the bank. The
complainant said that Wavetower Limited’s involvement in the transaction
was merely as a guarantor over Rangers’ obligations to the ticket firm, and
that Rangers did not owe Wavetower Limited £18million. The complainant said
that the debt could not have been assigned to Wavetower Limited as the debt had
been repaid by Rangers and no longer existed; only the security – which did not
capture any funds – had been assigned to Wavetower Limited. The complainant
noted that the assignation agreement was a loan and said that his net worth
could not have increased as a result of taking out a loan.

8.
The complainant said that he did not charge Rangers any interest, and that no
such fees were received by Wavetower Limited. He said that the £962.29 related
to the amount due to the bank, and not to himself or any of his companies.

9. The
complainant said that he did not renege on a pledge to pay a £2.8million tax
bill. He said that there was no specified time limit on paying the bill, and
that it was under appeal at the date of Rangers’ administration. The
complainant provided a copy of the Share Purchase Agreement between Wavetower
Limited and another company owned by the complainant, which sought to
demonstrate this. He noted that the bill was received by Rangers’ previous
owner, and that it was not a personal obligation.

10.
The complainant said that the article gave the misleading impression that the
proceeds from the sales of the shares that Rangers held in another football
club had been deposited in his personal bank account. He said that the account
was under Rangers’ name and ownership, and under his control only in his
capacity as director of Rangers, as per normal corporate procedures and company law.

11.
The newspaper did not accept that there had been a breach of the Code, and said
that the article was an accurate report of the assignation agreement. It said
that it was not misleading to refer to Rangers as the complainant’s “cash cow”,
given that the basis for this claim was made clear within the article.

12. The newspaper said that it was
not inaccurate to report that the complainant had "pocketed"
£18million on the date that he purchased Rangers. It said that Rangers had
repaid its debt owed to the bank, via Wavetower Limited, which was in turn
granted a floating charge over Rangers to the sum of £18million. Rangers had an
£18million liability to Wavetower Limited. The newspaper said that as the
complainant was the sole shareholder in Wavetower Limited, he effectively
became an £18million creditor of Rangers, increasing his net worth by
£18million. It said that this sum was not an “actual” monetary gain - the
£18million debt was transferred to Wavetower Limited and was
now owed to the complainant.

13.
The newspaper said that the assignation agreement listed the consideration of
the debt as £18,000,962.29, which was the security plus one day’s interest, to
which the floating charge related to. It said that this amount transferred as
debt which was owed to the complainant by Rangers, and that this was an asset
on the complainant’s “personal balance sheet”.

14.
The newspaper said that Wavetower Limited was seeking to recover debt amounting
to £18,000,962.29from Rangers’ liquidators. It said that this supported its position that Rangers
owed Wavetower Limited this amount, and that the complainant had an £18million
asset. The newspaper provided a copy of a court judgment which demonstrated
this. The complainant said that this claim was not pursued while he was a
director of or shareholder in Wavetower Limited. He said that in any event, if
the claim had succeeded, the money would have been due to the ticket firm under
the guarantees.

15.
The newspaper said that the complainant had been issued a tax bill of £2.8million
six years ago which to date, has not been paid by himself or Rangers. It said
that, as such, it was not inaccurate to report that the complainant had reneged
on this pledge. The newspaper also said that the article did not state or imply
that the complainant received a £60,000 salary from Rangers, but reported that
this was a possibility.

16.
The newspaper said that the proceeds from the sale of the shares held by Rangers,
in another football club, were placed in a stockbroker client account which
only the complainant had the authority to transfer funds out of, not Rangers.
The newspaper provided an excerpt of an email from the stockbroker to the
complainant, which it claimed had demonstrated that the complainant assumed
personal control of the financial dealings of Rangers.

Relevant Code Provisions

17. Clause 1
(Accuracy)

i) The Press must
take care not to publish inaccurate, misleading or distorted information or
images, including headlines not supported by the text.

ii) A significant
inaccuracy, misleading statement or distortion must be corrected, promptly and
with due prominence, and — where appropriate — an apology published. In cases
involving IPSO, due prominence should be as required by the regulator.

iii) A fair
opportunity to reply to significant inaccuracies should be given, when
reasonably called for.

iv) The Press, while
free to editorialise and campaign, must distinguish clearly between comment,
conjecture and fact.

Mediated Outcome

18. The complaint was not resolved through direct
correspondence between the parties. IPSO therefore began an investigation into
the matter.

19. During the investigative process, the newspaper offered
to publish the following clarification on page 2 of the newspaper, and as a
footnote to the online article:

Following our coverage on June 7 about the takeover of Rangers by Craig
Whyte’s company, Wavetower, Craig Whyte contacted IPSO and has asked us to
clarify a number of matters: namely that he never received £18m at any time, he
did not renege on a tax bill of £2.8 million because it was under appeal at the
date of Ranger’s administration, he did not personally benefit from the sale of
the Arsenal shares and he did not receive a fee of £60,000 per month.

20. The complainant said that this would resolve the matter
to his satisfaction.

21. As the complaint was successfully mediated, the Complaints Committee
did not make a determination as to whether there had been any breach of the
Code.

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